FX loan amendment: Banks likely to pay more


A parliamentary committee submitted an amendment to the borrowers' relief legislation that would lower the interest spread lenders may use for forint loans converted from loans denominated in foreign currencies. Analysts said the amendment, likely to be passed on Tuseday, means banks will pay more than was originally anticipated under the bill.

The original bill, which essentially requires that most foreign currency loans be converted to forint loans, limited the spread over the three-month Budapest interbank offer rate (BUBOR) to 2-5.5% for home mortgages and 2-7% for other mortgages. The amendment would reduce these spreads to 1-4.5% and 1-6.5%, respectively, according to MTI.

The amendment is also expected to extend the maturity threshold for FX loans that retail borrowers may keep, rather than convert, from one to five years.

In the original text of the bill, borrowers whose loans matured before the end of 2015 would be allowed to opt out of the conversion. In the amendment, the date has been changed to the end of 2020.

The borrowers' relief legislation approved in the summer requires lenders to compensate retail clients for using exchange rate margins when calculating repayments for foreign currency-denominated loans and for making unilateral changes to both FX and forint loan contracts.


POPIHN Raises Forecast for Fuel Consumption Energy Trade

POPIHN Raises Forecast for Fuel Consumption

Hungarian Lawmakers Ratify Finland's NATO Accession Parliament

Hungarian Lawmakers Ratify Finland's NATO Accession

Nolato Partners With Happy at Work HR

Nolato Partners With Happy at Work

Sümeg Castle Reopens History

Sümeg Castle Reopens


Producing journalism that is worthy of the name is a costly business. For 27 years, the publishers, editors and reporters of the Budapest Business Journal have striven to bring you business news that works, information that you can trust, that is factual, accurate and presented without fear or favor.
Newspaper organizations across the globe have struggled to find a business model that allows them to continue to excel, without compromising their ability to perform. Most recently, some have experimented with the idea of involving their most important stakeholders, their readers.
We would like to offer that same opportunity to our readers. We would like to invite you to help us deliver the quality business journalism you require. Hit our Support the BBJ button and you can choose the how much and how often you send us your contributions.